| Author |
Message |
Kim MM
Guest
|
Post subject: Is it worth the risk? |
|
|
| We have been approached by our Mortagage lender to refinance our loan so that they, in turn, can sell the loan and get it off their books. They want to lower the interest rate from 6% on 1st w/ 7 yr. ARM to 47/8% on 30 year. Also as part of terms would be a debt forgiveness on 1st and write off of our 2nd. We have conventional loan now and what they are offering is FHA. Do we have to pay tax on forgiven amount and how many points would this effect our credit scores? What other things do we need to know when considering this? Are we still responsible for paying the 2nd? |
|
|
jenkin7
Joined: 04 Jun 2007
Posts: 4537
Location: Hawaii
728.43 Dollars($)
|
|
Post subject: |
|
|
Hi Kim,
| Quote: | | hey want to lower the interest rate from 6% on 1st w/ 7 yr. ARM to 47/8% on 30 year. Also as part of terms would be a debt forgiveness on 1st and write off of our 2nd. |
If the lender forgives certain portion of the first or the second mortgage, it will be considered as your taxable income. But you can claim exemption from paying taxes on this forgiven debt amount, if you have used the property as your primary residence. You are not going to do a foreclosure or short sale or deed in lieu. So, your credit scores will not be hugely impacted. However, you should discuss with your lender about how they are going to report this to the credit bureaus. If the both the first and the second mortgages are with the same lender and he has agreed to write off the second, you will not be required to repay it. However, whatever the lender is promising, he must give it to you in writing. |
|
|
savior70
Joined: 25 Mar 2009
Posts: 1895
Location: Florida
261.84 Dollars($)
|
|
Post subject: |
|
|
To enterprise,
It sounds strange that you took out a second loan, but it is not registered against your house with the land registry! Lenders would not do such mistake because when they give you a loan, they do want you to pay in back in full. In you case, I’m not sure why it is not properly registered. I think you should consult an attorney and get the paperwork reviewed by him. He can tell you if the second loan agreement is legally void. By the way, have you contacted the second lender since the house was sold? Do they want to collect the second mortgage balance or have they forgiven the debt amount?
To anonymous,
A Home Equity Line of Credit is secured by the value of the property. The lender has the right to foreclose on your home if you default on the loan. If the borrower is deceased, the lender will sell off the property to recover the outstanding loan balance, even though the property has been transferred to another person. If that person wants to keep the property, he will have to continue making the payments towards the loan or will have to pay it off in full to satisfy the lien. |
|
|
Mitch
Guest
|
|
Post subject: 2nd (HELOC) charged off by Chase - option? |
|
|
I got behind on my second with Chase (HELOC) but am current on my first with BOA. I just found otu my HELOC was charged off and when I called to see what I could work out I was told that I could settle (for about .50 on the dollar) or they would foreclose. No payment plan was offered - simply settle or foreclose. On top of that, I can never get anyone live on the phone to negotiate, discuss, etc..
Does anyone have any advice? |
|
|
mud
Guest
|
|
Post subject: foreclosure by collection agency? |
|
|
can a collection agency who holds a 2nd (charged off by bank) "foreclose" on a home when the 1st mortgage is current?
thank you. |
|
|
jerry
Moderator
Joined: 17 Oct 2005
Posts: 2617
Location: MICHIGAN
415.55 Dollars($)
|
|
Post subject: |
|
|
Hi Mitch,
Chase charged off the HELOC because they considered the debt irrecoverable. Have they sold it off to a third party collection agency? It is unlikely that your house would be foreclosed for the second mortgage because if that was the case, Chase would not have charged it off. I believe you can settle the debt. The collection agency or the mortgage company, whoever holds the debt after the charge-off, will be willing to help you set up a repayment plan. You just have to be patient and need negotiate with them.
Hi Mud,
The collection agency is unlikely to foreclose your property for the charged off second mortgage. If it was worth while for the second lender to foreclose the property, he would never have charged off the debt. However, the collection agency can sue you if you do not make payments to them and may get judgment against you to garnish your wages or to come after your assets, savings accounts, etc.
Thanks,
Jerry |
|
|
Tiffany
Guest
|
|
Post subject: 2nd Mortgage Charge Off |
|
|
| My second mortgage was charged off by my mortgage company, without me knowing it. I recieved a call tonight from a company saying that they have the rights to the loan. I never recieved a 1099 or even a letter. This company says I am behind 18 months, I had my mortgage re-modified last year which i throught covered both loans.My question is do I have to pay this collection agency, also can they take my house. or what happens if they put a lein on my property. I have to wait until in the morning to call my mortgage company. Also I have already filed my taxes for the year but I did not report the write off because i did not know about it. Am i in troublr with the IRS now. please someone help, I am very confused as to what i need to do. |
|
|
jenkin7
Joined: 04 Jun 2007
Posts: 4537
Location: Hawaii
728.43 Dollars($)
|
|
Post subject: |
|
|
Hi Tiffany,
Are you sure the lender has charged off the debt and sold it to a collection agency? First, you should contact your second mortgage lender and see if they have really sent the mortgage debt for collections. You should also ask the collection agency to validate the claim that they now have legal rights to collect the debt.
The collection agency may try and get a judgment against you to garnish your wages. But they are unlikely to foreclose your property to satisfy the lien. If it were possible to recover the second mortgage lien through foreclosure of the property, the lender would not have charged it off.
The mortgage has been sent to collections. It has not been discharged and you still owe it. So, you do not have to report it as a write off. But if the lender forgives this debt, you will have to report this on your taxes as your income. |
|
|
gina
Guest
|
|
Post subject: Credit report |
|
|
| Unfortunatly I was part of the forclosure set this year, I recently pulled a credit report and noticed that the comapny holding the 2nd mortgage on my house charged off as bad debt and apparently turned the loan over to a collection agency, ok so before you start I get the fact they hired this company to collect and its a book keeping thing and that yes I am fully aware I owe the money and when I get to work again I will, however what I want to know is can bot the original mortgage company and the collector report to the credit burea? can I have one or the other removed from my credit report |
|
|
savior70
Joined: 25 Mar 2009
Posts: 1895
Location: Florida
261.84 Dollars($)
|
|
Post subject: |
|
|
To Gina,
Both the original mortgage company and the collection agency cannot report the same account to the credit bureaus. If the account has been charged off, the original creditor will report it to the bureaus. But once you start making payments to the collection agency, they need to report it to the bureaus. When you pay off the debt in full or settle the debt for a lesser amount, the agency should report it as "paid as agreed" or "settled". |
|
|
anonymous 2
Guest
|
|
Post subject: charge off on first mortgage |
|
|
| My mortgage company recently did a charge off on the first mortgage and not the second mortgage? Why was this done? What recourse do I have? |
|
|
nazia
Guest
|
|
Post subject: mortgage |
|
|
| i have a mortgage as well as secured loan ds are paying my mortgage interst and i cannot afford my payments on loan as i am on income support my aerres are mounting up can you help me |
|
|
jerry
Moderator
Joined: 17 Oct 2005
Posts: 2617
Location: MICHIGAN
415.55 Dollars($)
|
|
Post subject: |
|
|
Hi anonymous,
The mortgage company charged off the first mortgage because they probably think they cannot recover the mortgage balance from you. They want to report the loan as their loss for tax reasons. But since they have charged off the loan, it does not mean they will not come after you for the debt. They may send it to collections and a collection agency may come after you to collect the outstanding debt. You can negotiate for a settlement or set up a repayment plan in order to pay off the remaining balance.
Hi nazia,
If you cannot make the monthly mortgage payments, you can request the lender to do a loan modification. This will help you get a lower monthly payment so you can get current on the loan. The lender may also agree to reduce the principal balance to some extent. You can write a hardship letter to your lender to know if you qualify for the modification.
Thanks,
Jerry |
|
|
KimChi
Guest
|
|
Post subject: 2nd mortgage charge off |
|
|
| My 2nd mortgagee charge off my loan, but now I got a judment from it. They will bring me to the court. What should I do now? |
|
|
savior70
Joined: 25 Mar 2009
Posts: 1895
Location: Florida
261.84 Dollars($)
|
|
Post subject: |
|
|
Hi KimChi,
Has the judgment already been entered against you? Or it is that you have just been served notice to appear in the court for the judgment? If you have been served a notice, you should appear in the court at the specific date, else a default judgment could be entered against you.
Talk to the lender and try and settle the mortgage debt out of the court. Negotiate with the lender and try and set up a repayment plan to pay off the loan. |
|
|
Previous 1, 2, 3, ... 10, 11, 12, ... 24, 25, 26 Next 
